Description

To maximize their effectiveness, color cases should be printed in color.

Jeff Immelt, the CEO of GE, introduced a new innovation strategy named "healthymagination" in Spring 2009. With cost, quality, and access as its three pillars, healthymagination ensures a strong focus for new product introduction efforts all around GE. But will this focus enable GE to achieve and maintain market leadership across a healthcare market that is being buffeted by strong currents, including cost pressures, changes in chronic disease patterns, and rationalization of buyer behavior? Moreover, healthcare spending is also increasing in emerging economies, which could provide a strong growth engine for the future. Tom Gentile, the CEO of GE Healthcare Systems (GEHS), a key player in the Medical Imaging market, wonders how the innovation strategy might respond to these changes. GE has historically been a technology leader, selling the most advanced equipment to a variety of medical establishments. Will a complete shift to healthymagination allow GE to demonstrate strong organic growth through innovation, as Immelt had charged executives at GE?

Learning objective:

The purpose of the case is to enable discussion on how contextual changes in technology as well as customer behavior, combined with macro-trends, require a constant reassessment of a broad innovation strategy. Such a strategy has to work, not for one product at a time, but must be developed with an eye to developing product portfolios for the future. These changes might require companies to move from technology-leadership to market-leadership. How should managers think about strategies that are flexible to meet the needs of multiple product lines, multiple geographic markets, and different customer segments, but also be focused enough? This case has been taught in the Marketing core at Harvard Business School, as part of a module focusing on "Growing and Sustaining Value." It would also fit well in elective courses on Innovation, Technology Strategy, New Product Development, or High-Technology Marketing.